Reichenbach v. Windward at Southampton

Citation364 N.Y.S.2d 283,80 Misc.2d 1031
PartiesCharles REICHENBACH and Verna Reichenbach, Plaintiffs, v. WINDWARD AT SOUTHAMPTON, Defendant.
Decision Date08 January 1975
CourtUnited States State Supreme Court (New York)

Scheinberg, Wolf, Lapham, DePetris & Pruzansky, Riverhead, for plaintiffs.

Wasserman, Chinitz, Geffner & Green, Westbury, for defendant.

LEON D. LAZER, Justice.

To what degree has New York's highly restrictive vested rights doctrine fallen victim to recent appellate determinations which apply principles of equitable estoppel to zoning litigation? The answer is a requisite to the determination of the issues raised at the trial of this action in which certain Southampton property owners seek not only the enjoinder of further construction of a partially completed motel but its demolition and removal. The defendant partnership has expended in excess of $148,000 for construction of the motel and contends that its rights to complete the two fully enclosed structures are beyond the reach of newly enacted prohibitory town legislation. The essential facts follow.

On April 13th, 1970, while its property was zoned E Business District in which motels were a permitted use, one of defendant's predecessors in title, Land and Petroleum Corp. ('Land'), was issued a building permit by the building inspector of the Town of Southampton for the construction of a forty-unit motel. After installing footings and foundations in May of 1970, Land suspended all further work. In April of 1972, while contemplating purchase of the property, one of defendant's partners inquired of the building inspector whether the 1970 permit was still valid and subsisting. Despite the building inspector's affirmative answer, the Southampton town board enacted a new zoning ordinance on May 2, 1972 placing the property in the R--40 Residence District, a classification which excluded motel uses. Nonetheless, on May 9, 1972 the defendant's corporate nominee entered into a contract with Land's successor for the purchase of the 2.838 acres of real property at a price of $70,000, reserving the right of cancellation should it ascertain that the building permit was no longer valid. One of the partners testified that he was then aware that changes in the zoning ordinance were under consideration and he revisited the building inspector to make further inquiry. The building inspector again assured him that the permit was not affected by the new ordinance. On May 15, 1972, defendant submitted to the building inspector modified building plans which increased the number of motel units from 40 to 52, the floor area from 14,000 square feet to 20,648 and the total length of the two buildings from 277 feet to 393 feet. Although the new ordinance became effective on May 21, 1972, it was not until June that the modified plans were approved. Title was conveyed to the defendant on June 14th, 1972 and construction of the motel was promptly resumed. In July, the building inspector approved another modification of the plans further increasing the size of the proposed buildings. Construction continued until September 11, 1972 when it was halted in response to a stop order issued by the building inspector as a result of complaints to the town board by plaintiffs and others. By that time the defendants had expended $148,296 for the erection of the two structures which now exist on the premises. When the town refused to institute suit against the defendant to enjoin further construction, this action was instituted by the plaintiffs in October of 1972.

Plaintiffs' three-pronged attack upon the legality of defendant's building permit relies on theories of original invalidity, subsequent abandonment, and revocation by rezoning. The first contention is without merit. The building inspector's interpretation of Land's plans (as well as those of two other projects) as constituting motel and not apartment units is neither irrational nor unreasonable, although its correctness is not free from doubt. It is a cardinal principle of statutory construction that in case of doubt or ambiguity in the meaning of a law the practical construction that has been given to it by those charged with the duty of its enforcement takes on almost the force of judicial interpretation (Lezette v. Bd. of Ed., Hudson City Sch. Dist., 35 N.Y.2d 272, 360 N.Y.S.2d 869, 319 N.E.2d 189; see also West Irondequoit Teachers Ass'n v. Helsby, 35 N.Y.2d 46, 358 N.Y.S.2d 720, 315 N.E.2d 775; Howard v. Wyman, 28 N.Y.2d 434, 322 N.Y.S.2d 683, 271 N.E.2d 528).

The abandonment argument likewise fails for it is based upon Land's cessation of construction in May of 1970. Article XVIII, subd. 2 of the 1970 ordinance provided for automatic expiration of a permit if actual construction was not commenced within ninety days or an extension obtained but it is undisputed that the work was commenced within the statutory period. If, as claimed, the purpose of the statute was to mandate continuity in as well as commencement of construction during any fixed time period such a requirement could have been stated in the ordinance (Gulf Oil Corp. v. Vogel, 50 N.J.Super. 324, 142 A.2d 237). The real issue for determination is whether the permit survived the 1972 rezoning and the events which followed it.

According to the defendant was building permit survived the 1972 rezoning under both the traditional vested rights rule and a new balance of equities concept which it claims flows from the holding in Lefrak Forest Hills Corp. v. Galvin, 40 A.D.2d 211, 338 N.Y.S.2d 932, aff'd 32 N.Y.2d 796, 345 N.Y.S.2d 547, 298 N.E.2d 685, cert. den. 414 U.S. 1004, 94 S.Ct. 360, 38 L.Ed.2d 240.

Under traditional analysis the issuance of a building permit alone does not confer any rights which survive a zoning change (Sibarco Stations, Inc. v. Town Board of Vestal, 24 N.Y.2d 900, 301 N.Y.S.2d 637, 249 N.E.2d 478) and indeed the permit itself is revoked by the change if no construction has been commenced or liabilities incurred (Rice v. Van Vranken, 225 App.Div. 179, 232 N.Y.S. 506, aff'd 255 N.Y. 541, 175 N.E. 304). Expenditures made after a zoning amendment has become effective will not defeat it (See Claremont Gardens, Inc. v. Barker, 282 App.Div. 1069, 126 N.Y.S.2d 640; Rice v. Van Vranken, supra; Downey v. Incorporated Village of Ardsley, Sup., 152 N.Y.S.2d 195, aff'd 3 A.D.2d 663, 158 N.Y.S.2d 306; Wheatland v. Esso Standard Oil Co., 2 Misc.2d 784, 150 N.Y.S.2d 130; Anno. 49 A.L.R.3d, p. 78). A vested right to complete a nonconforming building matures when substantial work is performed and obligations are assumed in good faith reliance on a permit legally issued (Sibarco Stations, Inc. v. Town Board of Vestal, supra; Ortenberg v. Bales, 224 App.Div. 87, 229 N.Y.S. 550, aff'd 250 N.Y. 598, 166 N.E. 339). Basic to traditional vested rights jurisprudence is the tenet that there is no right to reliance upon an invalid building permit (Jayne Estates, Inc. v. Raynor, 22 N.Y.2d 417, 293 N.Y.S.2d 75, 239 N.E.2d 713; B. & G. Constr. Corp. v. Board of Appeals of Vil. of Amityville, 309 N.Y. 730, 128 N.E.2d 423; City of Buffalo v. roadway Transit Co., 303 N.Y. 453, 104 N.E.2d 96; Cortodd Homes Inc. v. Misiakiewicz, 45 A.D.2d 1008, 358 N.Y.S.2d 211; Bogart v. Woodburn, 40 A.D.2d 888, 337 N.Y.S.2d 135; Soros v. Board of Appeals, Village of Southampton, 50 Misc.2d 205, 269 N.Y.S.2d 796, aff'd 27 A.D.2d 705, 277 N.Y.S.2d 821; Colonial Beacon Oil Co. v. Finn, 245 App.Div. 459, 283 N.Y.S. 384; Rollins v. Armstrong, 226 App.Div. 687, 233 N.Y.S. 359, aff'd 251 N.Y. 349, 167 N.E. 466; Pagnotta v. Roberts, Sup., 101 N.Y.S.2d 836; Inzerilli v. Pitney, Sup., 30 N.Y.S.2d 129).

Application of the traditional rule to the instant factslimits the expenditures upon which defendant may rely to those made by Land in 1970; defendant's own expenditures made after the effective date of the 1972 ordinance are irrelevant. Land's 1970 construction costs of $3150 for footing and foundation work and $3345 for plans and surveys do not meet the substantiality test under the rule (see Andgar Associates, Inc. v. Board of Zoning Appeals, 30 A.D.2d 672, 291 N.Y.S.2d 991) which requires that the expenses must not only be substantial in and of themselves (see People v. Miller, 304 N.Y. 105, 106 N.E.2d 34; Poczatek v. Zoning Board of Appeals, 26 A.D.2d 556, 270 N.Y.S.2d 980) but must be substantial in relation to the total cost of the project (see Town of Lloyd v. Kart Wheelers Raceway, Inc., 28 A.D.2d 1015, 283 N.Y.S.2d 756; Glenel Realty Corp. v. Worthington, 4 A.D.2d 702, 164 N.Y.S.2d 635, app. dism. 3 N.Y.2d 924, 167 N.Y.S.2d 939, 145 N.E.2d 880; Town of Hempstead v. Lynne, 32 Misc.2d 312, 222 N.Y.S.2d 526; cf. Millar v. Dassler, Sup., 155 N.Y.S.2d 975) which here was estimated to be $600,000. If the expenses relied upon are for foundation work, it must be shown that the work represents a substantial part of the structure (Riverdale Community Planning Ass'n, Inc. v. Crinnion, Sup., 133 N.Y.S.2d 706, aff'd 285 App.Div. 1047, 141 N.Y.S.2d 510, app. dism. 1 N.Y.2d 689, 150 N.Y.S.2d 616, 133 N.E.2d 839). There is no rational method of concluding that defendant's rights vested under traditional theory.

Defendant maintains, however, that it is entitled to a 'balancing of the equities' because it relied on the conduct of the Southampton building inspector who not only extended his assurances of the continuing validity of the 1970 permit but acted upon those assurances by approving both the modification of plans upon which the permit was based after the enactment of the new zoning ordinance and the continuance of construction based upon those plans. The assurances, of course, were erroneous and the approval of plans which increased the size and intensified the use of the buildings constituted the grant of a variance (see Crossroads Recreation v. Broz, 4 N.Y.2d 39, 172 N.Y.S.2d 129, 149 N.E.2d 65), a power which both the Legislature (Town Law § 267) and the town board (section 5--50--301.01 of the...

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